Time Warner Cable Sued For Passing Lakers-Dodgers Costs On To Customers

Time Warner Cable raised a lot of eyebrows when it paid $3B for TV rights to the LA Lakers for the next 20 years and then a record $8B for LA Dodgers rights for the next 25 years. When the Dodgers deal launches in 2014, the cable company will have four new networks for all that content. But the plan to partially pay for those new channels via boosting TWC customers’ fees — even from Southern California users who don’t want the channels and have no way to opt out of the bundles — apparently is not sitting well. Some of those customers filed a class action suit in LA Superior Court today targeting TWC, the Lakers and the Dodgers for restitution and injunctive relief for violating California Business & Professions Code 172000. The complaint (read it here) says unless restrained by the court, TWC will “pass these costs along to its total Southern California subscriber base, resulting, directly or indirectly, in additional fees passed onto subscribers beginning with the 2014 season of approximately $4-$5 per month per subscriber … which together add (or will if unrestrained) $100 per year to the subscriber’s TWC bill”.The plaintiffs provided more math with eye-popping numbers, writing, “In sum, TWC will extract from its customer base primarily in Southern California at least $11 billion to recoup its investment, and approximately 60% of this amount, or $6.6 billion, is extracted from individuals who do not want and do not watch and do not want to pay for Lakers and Dodgers telecasts and who, if given the option to do so, would opt out of such telecasts.”

The teams are part of the suit, according to the filing, because they knew the cost of the new channels — TWC SportsNet and TWC Deportes for the Lakers and in next year SportsNet LA for the Dodgers — would be passed on to consumers, even nonfans. “TWC’s practice of bundling these channels into the enhanced basic cable offering is an unfair method of competition. … The purpose of this lawsuit is to secure restitution for and injunctive relief against this practice”.

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Why not sue every network tv station, cable station for making Cable companies pay more and more...

John Santhoff

2 years

I work at a cable company in SoCal. A lot of people don't know the content providers...

The suit claims it is not challenging the “network of contracts between programmers and distributors” because TWC is acting as both sides in this situation. But bundling channels on tiers versus a la carte programming has long been bone of contention between consumers and the cable industries, with even Sen. John McCain recently weighing in with the proposed The TV Consumer Freedom Act of 2013, intended to allow cable customers a la carte capability — “in other words, not required to buy a whole bunch of channels that that consumer may not want wish to subscribe to,” McCain said last month when introducing the legislation on the Senate floor. He has since asked the FCC to look into the practice of bundling, which the industry argues keeps costs down.

The four named plantiffs — they reside in LA, Pasadena, Orange County, and Long Beach — are being represented by Maxwell Blecher and Courtney Palko of LA firm Blecher Collins Pepperman and Joye PC.

16 Comments

John • on Jun 18, 2013 5:51 pm

I’m not sure there are any legal basis for this, this is common practice that when cable networks costs go up, the users fees go up. At least LA is a major market with multiple good options…I don’t really get how a judge doesn’t dismiss this. If you don’t want to pay the 4-5 dollars – switch to Direc TV

I have directv… as a result of the Dodgers… directv issued an LA based 4 dollar sports up charge…

Steve • on Jun 18, 2013 5:51 pm

The TWC pricing is all coming down according to Hoyle. Nobody should be surprised by this. TWC knew all along how these deals would be paid for. The Dodgers certainly knew how the deal would be covered by TWC. This a case of a lot of greedy business executives laughing themselves silly behind closed doors over how badly the consumer is going to get reamed. I’m thrilled for this suit. It has absolute merit and the only thing I worry about as Dodger fan is, after this suit is won and the dust clears, I will not be able to afford the subscription channel the Dodgers end up being broadcast on.

John • on Jun 18, 2013 5:51 pm

I don’t feel this suit has merit – it’s capitalism – you don’t have to pay for the tier – fine they’ll move the dodger / laker channels to a new tier – and then less people will see them and then Time Warner will not be able to get as much money for ads so they’ll figure out ways to run more.

The lawsuit against MLB by the city of San Jose is hella more interesting

Yeah, but • on Jun 18, 2013 5:51 pm

When the FCC awards the cable companies exclusive franchises to a defined geographic area so that there’s no realistic competition for cable service and then the cable company turns around and bundles up cable, broadband and telephony, then they have their claws into you so deep that breaking the bonds and getting satellite service instead isn’t as simple as making a phone call.

There are people (like me) who would probably tear everything up and go with FIOS or some fiber optic service, were it available, but it isn’t in my area.

I used TWC for my broadband, so my email is a RR address. It’s been that way for years and years. It would be monumentally disruptive to my business (I work from home) to blow it all up and change it to another provider.

On a side note, I could easily be a plaintiff to this suit. I’m not a baseball fan in general, but I absolutely HATE the LA Dodgers. Totally not a basketball fan at all, don’t care about it in any way shape or form.

That TWC decided to screw the pooch and pay out $8bn for TV rights to a bunch of overpaid, spoiled children shouldn’t be my lookout. Why doesn’t TWC do what the Yankees and Cablevision did and set up a paid RSN like YES and let the people who do want it, pay for it?

Walter • on Jun 18, 2013 5:51 pm

I already have an idea to end this lawsuit. Make all sports channels “premium” channels, where customers who want them pay an additional fee. While it will shrink the footprint of the audience, it will increase the “loyalty” factor that advertisers will pay a premium for, in addition to the fact that these games are practically DVR proof. Look, if these networks want to be paid tons of money for its subscribers, make the subscribers who WANT the channels (like HBO) pay the extra fee forints product.

cut the cord, what are you waiting for? • on Jun 18, 2013 5:51 pm

EVERYONE has a way to “opt out of bundles.” CUT THE CORD! It won’t kill you. Promise!

Lawsuits aren’t the answer. Millions of fed-up consumers who realize they can live without cable – live better, really – that’s the answer. Let the market decide!

sammynews • on Jun 18, 2013 5:51 pm

Jack Warner lives!

Jed • on Jun 18, 2013 5:51 pm

Best thing to do here is just cancel your cable subscription and tell them to stick it where the sun doesn’t shine. This is TWC’s way of trying make up for paying astronomical fees for all these sports entities and thank ESPN for starting all this, with them buying tons of rights for all kinds of sports and then having the cable and satellite companies jack up the rates of their cutomers to pay and offset those fees, even if some customers don’t want the content at all.

Edmund Singleton • on Jun 18, 2013 5:51 pm

DirecTV is doing the same to me every month, $2.00 worth…

rovers • on Jun 18, 2013 5:51 pm

The only person that will make money on this case are the lawyers. The premium idea wont work because there aren’t enough baseball fans willing to pay the $40+ this channel would cost (think Sunday ticket). TWC did mainly to be able to keep the license fees in check for 20+ years. If Fox or ESPN bought the rights they would have stuck it to TWC harder that TWC is sticking it to their consumers….you just wouldn’t see it.

Sean • on Jun 18, 2013 5:51 pm

Is this some kind of joke? This isn’t sewage or trash or electricity. Nobody has a right to cable television service.

saffron • on Jun 18, 2013 5:51 pm

I agree. Cable companies suck, but people who whine about their rates without doing the obvious thing suck more. If a product or service costs too much, don’t buy it!

John Santhoff • on Jun 18, 2013 5:51 pm

I work at a cable company in SoCal. A lot of people don’t know the content providers (In this case the “Lakers” and “Dodgers”) require as part of their carriage contract that Time-Warner (Or any cable or satellite provider) MUST place their content is their basic or regular programming tier. The only choice the content provider has if they are going to carry or not carry the content. Ironically Time-Warner is under fire in San Diego for NOT giving in and carrying “Padres” baseball. The bad guys here are the “Lakers” and “Dodgers” who mandate the “Must Carry” rules for carriage on basic & regular tiers. I’m sure Time-Warner would love to put the “Lakers” and ” Dodgers” in a dedicated sports tier. The teams won’t allow that.

Anonymous • on Jun 18, 2013 5:51 pm

Why not sue every network tv station, cable station for making Cable companies pay more and more for their programing which is passed to the customers of those companies. This lawsuit is stupid they don’t have to subscribe to TWC.

Mr.Practical • on Jun 18, 2013 5:51 pm

Basic hd cable costs nearly $100 bucks a month with the required boxes, services and taxes. I cancelled my cable & could not be happier. So if your purely a sports watcher you are paying $100 just to watch your teams Not the $5 everyone is talking about. Cancel your cable now! There is life after sorts. Believe me i discovered it!